Dealing with unexpected retirement expenses
|By Carole Moore
Unless you're a multimillionaire,
your concept of retirement and reality may
be worlds apart. You envision daily rounds
of golf, hitting the road in a huge RV and
smacking down your Visa at every cash register
within a three-state radius -- really living
the life of the bumper sticker that says, "We're
spending our kids' inheritance."
Thing is, it may not be their inheritance you're spending
but your own hedge against inflation and unanticipated expenses.
The bad news is the majority of future retirees won't have enough to meet their obligations without help. The good news? It's not too late to fix the problem.
But there are drawbacks -- it takes time, hard work and commitment, not to mention self-denial and readjustment of expectations, to face retirement on solid ground.
|A lot of different forces may be
yanking at your money but many are
within your control. First we provide
a short list of unexpected bad luck;
next, some ways to deal with real-life
Some bad luck you may run into
Additional (unanticipated) dependents. Your elderly parents need help. Your adult child hits a rough spot and moves back in. Suddenly, you're sandwiched. The income judged perfect for two must stretch to accommodate three or more people.
Big-ticket expenses. Your roof needs replacing. Your car, refrigerator or heat pump dies. Termites turn up in your walls. Do you have the cash to cover expenses like these?
debt. You finance your car, put your
clothes and groceries on credit cards and
buy major appliances on time. Soon the interest
piles up and your payments barely punch a
hole in your original debt.
A bout of bad health. Escalating health costs continue to drive up out-of-pocket expenses. What happens when the cash you counted on to pay other bills must be diverted to health concerns?
taxes. Maybe your taxes fall into the
manageable range now, but what about in 10
years? Congress is already rumbling about
raising taxes and that's not the only chunk
of cash the government covets. Local property,
sales and state income taxes are also almost
certain to increase.